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Rabbits and foxes

A couple of weeks ago, at a very large event in Brussels, I sat and watched several government officials, from the US and EU, debate innovation policy. This sounds very grand, but what they actually said, to paraphrase, was “we want to stimulate innovation by spending money and protecting intellectual property”.

Driving innovation—but which way?

At an FFII meeting last week, I realised what governments have been thinking. Patents = innovation. This seems obvious but it took me a while to grasp. Governments actually believe that more patents means more innovation. The number of patents has grown tremendously over the last decades. The amount of innovation also appears to have grown tremendously over the last decades. But, I wondered, what is the cause, what is the effect, and what is our perception of the two? Let me tell you what I think.

First, I think innovation has nothing at all to do with how much money is spent or how well IP is protected. Most innovation comes from the simple economic principle of specialisation. That is, as Adam Smith pointed out a long time ago, the basis of all wealth. We specialise, we compete, and we trade. And we innovate in order to do these better.

How can you pay people to specialise, compete, or trade? The concept is ridiculous, and indeed, in my twenty-five years of writing software for money, I’ve not once seen research grants actually prodding people to do anything except get better at asking for research grants. There is competition for grants, remember.

Paying grants and subsidies for research is like feeding animals. Yes, you can raise a huge herd of tame sheep like that, but the real action happens in the wild, and you cannot feed wild animals without turning them stupid, fat, and lazy.

What government can do to promote innovation is to lower the cost of communications, to increase the size of the market, lower taxes, and remove barriers to competition. Then, I believe, you actually have to tie people down and hack their arms off if you want to prevent innovation. And no, I’m definitely not promoting arm-hacking. It is a figure of speech.

Software is special

So, if patents (software patents in specific but all patents in general) do not promote innovation, what do they do?

As far as I can see, the relationship between innovation and patents would apply to all industries, but software is special for a couple of Very Big Reasons. First the rate of innovation in software is several orders of magnitude greater than in any other industry, because it is a self-hosting technology. Improvements in normal industrial products do not automatically improve the processes that produced them. But if I build a faster compiler, this lets me compile my compiler faster. Secondly. software is the basis for our entire modern service economy. We are all software users and the rate at which we depend on a flourishing and open software industry is increasing all the time.

Any slowdown in the rate of software innovation is a serious threat to our modern economy. So, when I hear, for instance, a large software firm admit that software patents make it impossible to produce new standards today, this does two things. One, it scares me. Two, it tells me that software patents are having a real effect on innovation.

Boom times

I’ll sketch what I believe are the eight stages of the software innovation and patent boom and bust cycle.

First stage: software comes into its own as a domain of technology. Up to about 1980, software was still seen as a branch of mathematics. By 1985 this was no longer the case.

Second stage: large software manufacturers convince the patent offices to change the definition of “subject matter” so that software becomes patentable. In the USA, this happened in the early 1990’s. In the EU this happened informally, through half-licit legal interpretation.

Third stage: large patent holders push for software patents to be granted more easily, and patent offices start to grant patents on non-software methods, mainly business methods. In the USA this happened from 1999 onwards, and in the EU more or less in parallel with software patents. Governments, seeing the boom in patents, rub their hands with glee, thinking this is the precursor to a new golden age.

Fourth stage: specialist patent firms understand that soft patents (software and method patents) are an excellent opportunity, and start to invest massively in these patents. This happened in the USA and EU more or less at the same time, from 2000 onwards. Again, the growth in patents impresses everyone except the engineers and specialists who are actually involved in innovation, who start to get very concerned.

Fifth stage: patent holders, who represent a new and wealthy propertied class, lobby for better enforcement of their patents, no matter how trivial or obvious, once granted by the patent offices. The enforcement happens through the courts. In the EU, patent owners lobby for EU-wide standards on enforcement. In the USA, national enforcement was never an issue. In the EU, it is the burning issue today.

Sixth stage: software patents start to attack the process of innovation and people panic. Discussion starts about whether this was all such a good idea, and how to raise the quality of software patents. The USA has started to enter this debate, and the EU has been wallowing in it, largely thanks to the FFII, for years.

Seventh stage: legislators understand, too late, that there is no way to separate the bad software patents from the good. Any filter or gate or barrier that lets through good software patents (if such animals exist), also lets through an infinite horde of bad ones. Industry starts to clamour for a general ban on software patents. In the USA and EU, we are several years away from this.

Eighth stage: legislators are faced with the task of undoing everything that has happened since stage two. I don’t want to speculate on how this can even be done. Can software patents, once granted, be revoked without creating incredible outcry?

In the meantime, we have a period of at least ten years in which innovation in the software world is effectively dead. Programmers will, of course, continue to program. But the open market will die. Small numbers of monopolies will replace the current software industry. Open source may well get patent exemption, but this would be as good as a declaration of war on small commercial software firms.

Overall, it is a tragic and bleak picture of the future.

Ripping their necks out

I will now try to give you an analogy for this scenario. In the 1980’s, scientists studying the population curves of snowshoe rabbits and foxes (ok, it was lynxes but no-one except Canadians and Scots knows what lynxes are) in the Canadian north, found the populations went up and down in cycles. Basically, rabbits breed faster than foxes, so a rabbit population can grow in one season much faster than the fox population, stopping only when they reach the limit their grassy ecosystem can support. The rabbits have a great first couple of years, but then the fox population catches up, and suddenly there are too many predators for the rabbits. The rabbit population crashes, and a little later, so do the foxes.

What I’m saying is that innovation is rabbits, and soft patents are foxes. Software patents eat innovations. They hunt them down, jump on them, bite through their necks, rip their bodies to shreds, and feed them to their young. It’s really like that, but with more violence.

Now, the government official responsible for Rabbit Production, who comes for a couple of months to monitor the rabbit population, sees that the rabbits are breeding wonderfully (he’s obviously not an Australian), and the foxes too. He sees that the more foxes, the more rabbits! It’s amazing! He goes off and starts a fox farm, releasing even more foxes into the wild, because he’s jumped to the conclusion that rabbits generate spontaneously from foxes. Correlation and causation are two entirely different things, but the rabbit man does not understand this.

And our large software firms, who are buying patents as fast as they can. What are they? Well, imagine very large, very juicy, and very, very stupid rabbits, who have found nothing better to do than help the government official breed foxes...

You can hardly be angry with Big Software. The bigger they come, the harder they fall.

Reprinted

I originally wrote this story on my blog, in April. I’ll be posting a third article in this series on software patents in the next few days, about what is happening right now in Europe.

Comments

Perhaps one idea might be for all GPL coders to itemise all the patents (especially the ridiculous ones) that their software infringes?

One could categorise all the software patents in terms of frequency in the field and help coders figure out which of them they've infringed.

As GPL source agglomerates it would build up an ever longer list of infringed patents.

That way if these non-coder hand-wringing innovation enthusiasts could see how farced-up their thinking was, they might think twice.

Not least, they might realise precisely how much infrastructure would have its plug pulled. It shouldn't just be a case of drip-drip litigation and extortion as the patent holders pore over the source code of each victim.

If we're not careful Europe will want to catch up with the highly innovative US and also legislate software patents.

>Perhaps one idea might be for all GPL coders to itemise all the patents (especially the ridiculous
>ones) that their software infringes?

Not a prudent move—ask a lawyer and they'll tell you. Under the US system, if you don't know which patents you infringed, then you can use that as a defence that the infringement wasn't wilful. So if you do know which ones you infringed, then that makes the infringement worse.

A few years ago the FSF, I think it was, sponsored a study to find out which patents were likely to be infringed by free/open-source software. The consultants they hired came up with a list of about 200. But that was all we were told—just the number, not the details. Because if anybody involved in those projects found out which exact patents they might be infringing, then bang goes their chances of defending a lawsuit.

I worry a lot about this, and it's hard to imagine that lawmakers will ever understand the nuances of the subject, or see the harm that is being done, until it is much harder to undo.

Maybe with this new Democratic congress in the U.S., we can lobby that free software (that is, software that meets the free software definition) should be excluded from patent considerations. Argue it from the public good and watching out for the little guy angle. Stress that it would benefit the poor and disenfranchised. It would be an easy thing for them to grant, costing no money.

Pete Ashdown (founder of XMission) would've been a great choice. We would've had the side benefit of getting ride of Orrin Hatch, one of the worst lawmakers with respect to technology and consumer rights.

However, since I don't live in Utah, I couldn't vote for him.

In 1995, Newt Gingrich wrote in his introduction to Alvin and Heidi Toffler's "Creating a New Civilization: The Politics of the Third Wave":

"The reality is that transformation is going on everyday in the private sector among entrepreneurs and with citizens who are inventing new things and creating new solutions because bureaucracy doesn't stop them."

It's important to court both major parties in the United States. There are intelligent Republicans who understand where the future is leading us. We (meaning geeks and free software enthusiasts and free software businesses) need to find out who they are, and work closely with them to help them craft intelligent, forward-thinking (that's a phrase they love) policy.

Mr. Gingrich's quote sums up exactly how we need to approach the Republicans. We need to convince them that software patents increase bureaucracy, which in turn inhibits "innovation" (a word that has been co opted by marketers and breathless tech journalists).

Right. I was playing off the Democrats as the defender of the meek theme, but I agree it's going to take some convincing of people on both sides, with different emphasis for each.

I've been thinking about a letter writing campaign with my senators and representative, and maybe trying for a meeting with some staffer or the congressperson myself. Two of the three are Republicans. Not sure if this would be effective in the least, but I guess I could print the letters here or at my own blog so it wouldn't be wasted effort.

Some interesting thoughts about what the election might mean for some "freedom" issues at http://www.publicknowledge.org/node/709.

The big corps are more like big, cannibal foxes. They figure to eat both rabbits and other foxes until in the end they'll have eaten most of the rabbits and all the other foxes, at which point they'll be this huge, landscape-dominating mutant fox, ruling the barren wasteland. They imagine that when that happens they can maintain a few rabbits in a hutch to keep themselves fed.

Politicians and public servants want to put simple numbers on everything so that they can show how successful they are. You can count patents. The trouble is, counting patents is NOT a good measure of innovation. I wonder is there an effective measure of innovation?

Here are some ways of measuring innovation over different periods/geographic areas:

Amount of VC investment

Number of researchers and engineers

Number of new small firms

Investment in R&D by firms

Number of publications

Number of new projects (in free software ecologies)

Number of new standards under development

Number and size of industry events (trade shows)

Number of trademarks sought in high-tech sectors

All these are measurable using modern techniques such as cluster sampling - you take (e.g.) twenty random areas and sample every single firm in that area.

However the patent industry largely drives the debate and it works hard to promote its own studies, which are typically based on interviews with "stake holders", i.e. patent holders. To my knowledge, no-one has done a proper study to measure innovation vs. patents. It would be a ground-breaking piece of research, and I'm willing to bet that the results would show a "rabbits and foxes" pattern, in any given industry.

Such a study could also be conducted on historical data, in industries that were heavily patented in the past.

Politicians, driven by the easy rhetoric of the patent industry, make the sins of confusing correlation with causation. Only a few of the above indicators actually has an effect on innovation. Perhaps publications, and number of researchers and engineers.

My thesis is that innovation comes simply from specialisation and competition, the main drivers of all economic activity. I.e. to get more customers for my bakery, the best way is to specialise, i.e. focus on a particular type of bread or cake, and then innovate, i.e. make that better (and cheaper) than anyone else around.

So the best way for governments to drive innovation is to create bigger markets (so that more people can buy my bread), to remove barriers to competition (so that cake making is not a protected monopoly) and to make communications cheaper (so I can exchange recipes with others).

Patents that cover underlying principles rather than specific products, which includes all software patents, are a barrier to competition, so are bad for innovation. Patents on bread or cake recipes would be catastrophic for innovation and competition in the bakery industry.

Perhaps the US patent system is one of the causes of America's loss of competitiveness, falling from 1st place to 6th place last year.

Author information

Biography

Pieter Hintjens is the CEO of iMatix Corporation, and the author of numerous free software tools published by iMatix. He wrote his first GPLed software (Libero) in 1992. He was the main author of the AMQP messaging protocol specification, and iMatix's OpenAMQ messaging software handles around 1bn messages a day for a large bank. He is the past president of the FFII, an association which has fought software patents and defended open standards and competition since 1999. In 2007 he founded the Digital Standards Organization.